Hospital finances causing anxiety

Directors may look at property tax again
Reporter Editor

Richards Memorial Hospital is enduring yet another crucial period of financial troubles and Rockdale Hospital District (RHD) directors have not ruled out the possibility of re-examining a property tax.

Carl Hudson, RHD board president, told The Reporter on Monday the hospital’s situation was “touch and go.”

“It’s very tight,” he said.

Phil Ellett, CEO of Blackhawk Healthcare, which operates the hospital, confirmed that “about five” physicians previously affiliated with RMH are no longer employed there.

The hospital’s cath lab has closed, although Ellett says RMH continues to offer cardiology services.

COST-BENEFIT— Hudson said the current financial situation has been the subject of executive session discussions between the board and Blackhawk.

“We can’t go into detail about what we’ve discussed in executive session but we know the community is concerned,” he said.

Hudson said contracts with physicians were not renewed after a “cost-benefit analysis” was performed by Blackhawk.

“The bottom line was, the hospital just couldn’t afford them (the physicians) at what they were making,” he said.

Ellett said Blackhawk continues to recruit physicians.

On July 28, Blackhawk cut the RMH workforce by 15 to 20 percent, an estimated 30 to 40 jobs.

PROPERTY TAX— Hudson said directors realize f loating the possibility of a property tax hasn’t been on the “radar” screen of Rockdale residents.

The 2006 merger with Blackhawk, which formed Little River Healthcare to include medical facilities in Rockdale and Cameron, was widely perceived to have ended RMH’s chronic financial problems.

That does not appear to be the case.

City of Rockdale voters approved creation of a hospital district, and a sales tax, to help fund the hospital in 1994.

Voters okayed raising the district’s property tax cap to 50 cents in 2000.

That rate, initially set at 48 cents, was lowered to zero in 2007.

“Re-examining a property tax is one of our options,” Hudson said.

CONTRACT— Hudson said the hospital’s financial picture has deteriorated this year, saying he could not provide specifics.

“This (RHD) is a good board and we’re asking a lot of questions,” he said. “We are working w ith Blackhawk to make the hospital viable.”

The contract between the hospital district and Blackhawk was signed is “unilaterally renewable” by Blackhawk in three-year increments through 2024.

Ellett said Blackhawk is “now focusing on services the community needs” rather than cutting staff. “We’ve got some dedicated people that want to build this business,” Hudson said.

Both men said Blackhawk continues its quest to purchase the hospital’s physical plant. An executive session was held Tuesday at RMH on the subject.

Richards Memorial Hospital

Milestones, 1989-2010

1989—Rockdale Hospital Authority board chair Emory C. Camp announces RMH is in financial crisis and may close. The community rallies and, with the help of three $50,000 Alcoa Foundation grants, raises over $400,000 to support Richards Memorial.

1994—Hospital authorities say RMH is again in crisis and needs tax money. Voters create a hospital district with taxing authority but officials choose only to collect a sales tax.

2000—RMH is again in crisis and officials ask voters to raise the hospital district’s property tax cap to 50 cents. District voters comply and a 48-cent rate is set.

2006—With RMH’s financial situation improving, the district signs an agreement with Blackhawk Health Care to operate the hospital and clinics.

2007—Directors set the district property tax rate at zero.

2009—Voters okay a municipal development district to be funded by sales taxes formerly contacted by the hospital.

2010—Rockdale Hospital District board president Carl Hudson terms the hospital’s status “touch and go” and says directors may be looking at a property tax as an option.

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2010-11-04 digital edition

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